DoT clears Rs 4,000 crore telecom tower deal between Idea and ATC

The Department of Telecommunications (DoT) has cleared the Rs 4,000 crore telecom tower deal between Idea Cellular and American Tower Corporation (ATC) for the sale of mobile towers to ATC.
telecom tower in India rural area
The DoT approval will be paving the way for merger between Vodafone India and Idea Cellular, the second and third largest wireless operators in India, PTI reports.

American Tower Corporation signed the telecom tower deal with Vodafone India and Idea in November 2017 to buy their standalone towers for Rs 7,850 crore. The deal excluded holding of Vodafone and Idea in Indus Towers.

The standalone tower businesses of Vodafone and Idea Cellular have a combined portfolio of nearly 20,000 towers, which included around 10,200 towers of Vodafone and the rest of Idea Cellular.

ATC Telecom Infrastructure will have around 68,000 mobile towers in its tower business in India.

DoT wanted to clear the telecom tower deal among Idea Cellular, Vodafone and ATC before approving the multi-billion merger deal between Idea Cellular and Vodafone Group of UK as change in structure of the organisations would have created complexity in document work.

The Aditya Birla group firm has an option to sell its 11.15 percent equity stake in Indus Towers for a cash consideration of around Rs 6,500 crore. Indus Towers, India’s largest cellular tower company, is a three-way venture among Airtel, Idea Cellular and Vodafone.

The lower level of debt and operational cost in the merged entity is expected to stabilise the position of both Idea Cellular and Vodafone in the Indian telecom market, which is reeling under heavy debt and facing intense tariff war in the wake of the entry of Reliance Jio.

The free voice and data services announced by Reliance Jio, a company owned by Mukesh Ambani, forced all telecom operators to slash their mobile tariffs from 2016. The Indian telecom market, which has more than a billion mobile subscribers, is yet to come out of the financial burden due to weak business conditions.